Madrid, August 1 (EFE).- The Spanish airline Iberia has cancelled the purchase of Air Europa because “in the current regulatory environment” continuing with the operation “would not be in the interest of the shareholders,” according to a statement issued by the Spanish company. Thursday to the National Securities Market Commission, the stock market regulator in Spain.
International Airlines Group (IAG) -which includes the airlines Iberia, British Airways, Vueling, Aer Lingus and Level- had offered to get rid of 52% of the routes operated by the also Spanish Air Europa in 2023, to obtain the approval from the European competition authorities, which maintained objections to the merger.
The merger would affect flights between Madrid and the United States or Latin America, since Iberia and Air Europa compete in the Latin American market and have overlapped in many destinations such as the Dominican Republic, Cuba, Panama, Asunción, Bogotá, Buenos Aires, Miami or New York.
Iberia sources explained that the demands of the General Directorate of Competence of the European Commission to shed light green The costs of the operation are so high that it no longer makes business sense for the airline, so they have decided not to go ahead.
According to these sources, the transfer of up to 52% of Air Europa’s frequencies to other competitors and the guarantee that none of the routes on which the Commission European had identified competition problems and was left without a third operator, which supported the merger.
Iberia and IAG had presented a list of possible ‘remedy takers’ or “very solid” competitors to whom the routes are transferred, some of which, such as Spanish Volotea and the Colombian Avianca had even signed, alliances among them to be able to carry out operations with the greatest guarantees.
All this has been insufficient for the Commission, so the purchase of Air Europa “is no longer among our objectives,” say these sources, who “regret Brussels’ refusal to accept this ambitious proposal.”
They recall that Brussels has just approved other consolidation operations in the air sector, such as the purchase of the Italian ITA by the German Lufthansa, “and we believe that our proposal met all the conditions for following the same path.”
